It doesn't make it worse to have a better sprite. But it's funny that people base so much on sprites because it really makes no sense to do so when you think about how games work.
If you tend to rely on the sprite to gauge monster threat levels you're going to get in trouble. The graphics are only a symbol for what the monster is, after all. Making it look like a cute bunny, a green ooze, or a flying monstrosity doesn't change how the monster will interact with you mechanics-wise. This applies to games in general, really. Even those that have had graphics to begin with. And even more so with one that traditionally didn't.
For example, a red dragon isn't really a red dragon. It's an enemy with a certain amount of AC/EV/HP/damage-per-attack that has a branded ranged attack (with the label "fire"), can travel over "lava" and "water" flavored tiles without penalty, takes extra damage from the "airstrike" spell, and sometimes drops armor that grants resistance to it's ranged attack's brand and vulnerability to another brand of attack. "Red Dragon" is a convenient handle or label for the monster. But it could just as easily be "Minmay's Animated Elf Pictures" and it would be the same monster.
So if you're looking at the sprites and say, "Oh, it's just animated pieces of paper, no way that could be threatening," then you can see how you will eventually run into trouble. I think players using graphics to gauge monster threat level is the fault of the player, not of the graphic. Because it's a habit that players can (to their benefit in many games) easily unlearn.
This is part of why I prefer ascii to tiles in general, because they force you to think more symbolically in the first place. You're not going to think "it's just a cute little bird" with console.